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Will Silicon Valley Become Dole Country?

April 07, 1996

Washington Outlook

WILL SILICON VALLEY BECOME DOLE COUNTRY?

Your basic yellow-legal-pad kind of guy, Bill Clinton is hardly a technophile in the mold of Web-surfing Vice-President Al Gore. But during the 1992 campaign and early in his Presidency, Clinton became the darling of Silicon Valley by promising the high-tech industry everything from a permanent research and development tax credit and boosts in technology funding to a lifting of export controls on sophisticated electronics. GOP-leaning tech execs, including Hewlett-Packard Co.'s John Young and Oracle Corp.'s Lawrence J. Ellison, ran to his side.

Nowadays, however, many high-tech CEOs view the President more as a chump than champion--a turnabout that gives Bob Dole an opportunity to woo the Valley crowd back to the GOP. The execs fault the Administration for failing to make the R&D credit permanent, continuing an export ban on powerful encryption software, not pushing harder for deficit reduction, and--most important--vetoing a bill that would protect high-tech companies from frivolous shareholder suits. "There are a whole series of issues where Clinton has not come through," gripes Robert W. Holleyman, president of the Business Software Alliance. Indeed, federal records show a $1,000 contribution last year by Ellison to the Dole campaign, a donation Ellison now says he's unaware of.

SURPRISE VETO. The 72-year-old Kansas senator is hardly a cybernaut, but he is attracting some high-tech attention. Companies are backing a bill introduced by Senators Conrad Burns (R-Mont.) and Patrick J. Leahy (D-Vt.) that would ease export controls on encryption software, a move much coveted by the industry. "We were stunned to find that one of the sponsors is Bob Dole," says Kenneth R. Kay, executive director of the Computer Systems Policy Project, a group of computer industry CEOs.

Certainly, the industry had a strong incentive to check out Dole after Clinton's surprise veto of the securities litigation reform bill on Dec. 19. (Congress easily overrode the veto.) Valley companies, frequent targets of costly shareholder suits, had made litigation relief a litmus test. Clinton's veto decision left them feeling betrayed. High-tech consultant and Clinton fan Regis McKenna even fired off a vitriolic E-mail protest to the White House. The veto "caused us to wonder how valuable the high-tech industry really is to the Administration," says George H. Sollman, CEO of Centigram Communications Corp., a multimedia systems maker in San Jose. "Clinton handed Dole a huge opportunity."

NO GRUDGE. Industry leaders say it's too soon to tell how far Dole can ride this wave of discontent; he has been quiet on many tech issues so far. What's more, the Valley's oft-libertarian execs are spooked by Dole's rightward tilt on social issues and his recent call for corporate responsibility. Thanks to this "big anticorporate populist wave," says John Yochelson, president of the Council on Competitiveness, it's unclear if Dole is a better bet than Clinton.

Still, both sides crave bragging rights that come with the backing of America's fast-growth industries. Dole has tapped a high-tech adviser and visited a group of Valley CEOs earlier this year. And on Mar. 22, Democratic National Committee staffers queried high-tech investment banker Sanford R. Robertson about gathering 20 tech CEOs for a chat with Clinton. "He's trying very hard to win these people back," says Robertson. Both McKenna and Ellison are sticking with Clinton. "I think he is the best thing right now that is happening for the technology industry," he says. But glum Clintonites admit that view may be the exception. Getting the Valley back on board in '96 will be tough--especially for a yellow-pad President.EDITED BY OWEN ULLMANN By John Carey, with Kathy Rebello, in San FranciscoReturn to top

KODAK CALLS FOR BACKUP

- Eastman Kodak Co., frustrated that its unfair-trade case against the Japanese government and Fuji Photo Film Co. is going nowhere, is trying to build new political support for its cause. It was elated last year when the Clinton Administration launched a trade investigation that could lead to sanctions if talks with Tokyo proved fruitless. But U.S. trade officials have been stymied over Japan's refusal to even sit down at the bargaining table. So an anxious Kodak is now lobbying Congress for help in turning up the heat on both U.S. and Japanese trade officials.

Why has the case, alleging anticompetitive practices by Fuji and Japanese officials to limit Kodak's access to the Japan market, languished? Kodak didn't foresee the sea change in U.S.-Japan trade relations triggered by last year's auto trade flap and the advent of the World Trade Organization, which restricts unilateral action by the U.S. Tokyo, betting that Washington is merely bluffing about sanctions, has decided to stonewall on Kodak and other trade disputes.Return to top